Cox Communications will give customers who own TiVo's latest digital video recorders access to its entire video-on-demand library -- but for now, the MSO won't be offering a TiVo-based service or set-top itself.
Cox expects to enable access to VOD for TiVo Premiere DVR users in early 2011 across all major markets, offering up to 15,000 hours of video. The companies touted it as the first time a cable operator will integrate its on-demand service with a third-party retail device.
"This will provide our mutual customers another choice," Cox vice president of product development Steve Necessary said. "It does fully acknowledge the fact that consumers are consuming broadband content on TV... We think it's highly valuable combination."
Still, relatively few Cox customers use TiVos today. The operator, the third-largest in the U.S., serves more than 6 million customers -- but it had only 45,129 CableCards deployed for use in TiVos and other devices as of May 31, 2010, according to the National Cable & Telecommunications Association's most recent quarterly CableCard report.
Meanwhile, TiVo continues to lose customers by the thousands, with 2.51 million cumulative subscriptions as of April 30, 2010, down 22% from 3.20 million a year earlier.
As part of the new agreement, Cox will support TiVo Premiere DVRs purchased by subscribers at retail and online outlets as an optional set-top. The MSO will provide free installation -- which normally costs up to $75 -- including hooking it up to broadband and troubleshooting CableCard issues. In addition, Cox will promote the DVRs via its website, cross-channel advertising and via direct marketing to video and high-speed Internet subscribers.
"Until now, cable subscribers had to choose which kind of content on the on-demand side they wanted: the cable operator's VOD or TiVo's broadband content," TiVo president and CEO Tom Rogers said. "Now they can have it all."
For more than two years Cox has been in the midst a project to bring TiVo software to Motorola DVRs, following Comcast's deployment of the same configuration in New England. But Rogers said the priority for Cox and TiVo is now to enable VOD for Premiere DVRs: "The previous work we were doing was much heavier lifting... This represents a relatively quick time to market."
Cox did consider offering customers a lease option for the TiVo Premiere hardware, according to Necessary. RCN currently does that in all its markets and Suddenlink Communications plans to do the same starting later this year.
However, Cox didn't want to introduce set-tops that had inconsistent capabilities, Necessary said. For example, TiVos provide access to broadband-delivered content while Cox's currently do not.
"At the end of the day we felt the best option and alternative was simply to support the retail product as is," he said.
Cox does have an incentive to encourage more customers buy their own set-tops, as that reduces capital spending. The TiVo Premiere DVR with 320 Gigabytes of storage is $300, while the 1-Terabyte "XL" version runs $500.
The companies would not disclose whether Cox would receive a cut of the monthly TiVo subscription fee of $12.95. The MSO charges customers $2 per month for each CableCard they want to use.
This month Cox will begin the integration and testing work needed to make its VOD infrastructure based on SeaChange International software work with the Premiere DVRs. As in RCN's setup, the TiVo boxes will communicate with the Cox VOD servers using an IP signaling backchannel.
"It's largely leveraging the work we have done already with RCN," said Jeff Klugman, TiVo senior vice president and general manager of products and revenue.